Transcription
Why did you suddenly start a war again? There are many theories, for example, fear of death. Why wouldn't they want to be like you, Graham? This is a theory. Or perhaps you feel that the last time it wasn't over yet, and we lost a lot of face because of those 12 or 13, 12 points. Oh, almost every point, the US lost face. Actually, I'm not worried that the US won't have oil to use, because they produce a lot themselves and export it. But what will affect the oil price increase is not because the US is short of oil, but because the US might not have the ability, not enough oil to help others, and that will cause the global supply to be short, right? Your helper, Trump, actually, I have to say this: Trump has to thank China. China, the last time in China, helped the US suppress oil prices by doing what? By reducing imports by as much as over 4 million barrels per day. I don't believe that China will drag on in reducing oil imports by over 4 million barrels for many months like that. So, if Iran uses its ultimate weapon, anything it has, to make the market push oil prices up to 120, it will become a card that makes the US think, "Oh no, the US has to retreat again?"
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Your helper, Trump, actually, I have to say this: Trump, you have to thank China. China, the last time in China, helped the US suppress oil prices by doing what? By reducing imports by as much as over 4 million barrels per day. Or, to put it simply, China, if it imports normally, imports about 12 million barrels. China uses about 16 million, over 17 million barrels per day. Therefore, China imports a lot of oil, right? If we round it to 16 million, imports 12 million, it means China imports 3/4 of what it uses. Is that right? Of this 3/4, some will come from Russia, from countries that are not US allies. So China will be a bit safe, but there will be a part from the East. The part that was reduced by 4 million from 12 million, or over 7 million in June, when it came out, a reduction of 41%, is considered a very large reduction. This is simple. If we talk about the impact of the Strait of Hormuz, we say 10 million barrels, right? Approximately, right?
Yes. We don't know if it's really 10 million that disappeared, but we know it definitely disappeared. Maybe 8 million, 7 million, 9 million, we don't know, right? It will fluctuate around there. Let's say 10 million. Why didn't the oil price rise much in the past? One is that 4 million disappeared, and it was China alone. 4 million disappeared, see? Second, the remaining 6 million, where did it go? We have to look at the whole world. Oil has been released in the past 3 months, from March, April, May. For the 3 months before June, I haven't seen the numbers yet. For these 3 months, the numbers released, on average, over 90 days, are about over 6 million per day. What does this mean? If you combine these two, it's perfect. Why didn't the oil price rise at all? The first time it rose, it was called...
Yes. Right? People didn't know, so they just went for it, right? But later, it went down, down, down, right? Until you, Trump, came back and started a war again, it went up again. But at its lowest point, it went down to 70. If you had started a war again, it might have gone down to over 60. Because at that time, it was already at 70, right? I mean, before it went up again. Therefore, it means that actually, the 10 million barrel helper prevented the oil price from going anywhere much. This is correct. And when there were signs that the war was over, oh, it plummeted, plummeted, plummeted. This is the cycle of the past 3-4 months. Now, earlier, when we started the program, I said that the next round has more risk than the previous one, and that makes me believe that if you can control your risk factors, which is unlikely, because if oil exceeds 120, that is your risk factor, right? And if I were China, I would also be at risk now, whether China would return to importing more than before. In June, imports were only about over 7 million. Let's say China's imports increase to 9 million or 10 million. This means demand has increased by 2-3 million barrels. This means China is suddenly increasing global demand by 2-3%. Oh, 2-3% is a lot. Sometimes, for example, this year, do you know? OPEC forecasts that global oil demand growth will not even reach 1 million barrels this year.
Yes. Not even a million per day. If you say China will increase imports by another 2-3 million, do you think that's a lot? Oh, we don't need to analyze other countries. We just look at China. Whether China will return to importing a lot in July and August. If in July and August they import about 2-3 million, it's enough. It's not even back to the previous level. Because from over 7 million to 12 million, if I just add 2 million, it's only over 9 million, 10 million. This alone will be a downward pressure on oil, fundamentally. First, second, the Strategic Reserves or Inventories that the world has released, especially the US. Currently, the US has oil in its reserves of about 300 million barrels. 300 million is low, because its capacity is 700 million barrels. 300 million is not even half. And before the war, it was around 400 million. They didn't store much because nowadays the US doesn't focus on storing large Strategic Reserves because they produce a lot and export. They don't store much. But by not storing much, and now you've used it from almost 400 million down to 300 million. If you use 20 million barrels per day, let's calculate. If you divide 300 by 20, it's only a little over 10 days.
Yes. But it might not be that much, because the US produces a lot of oil itself, right? So, out of 20 million, they don't import much, right? Actually, I'm not worried that the US will not have oil to use, because they produce a lot themselves and export it. But what will affect the oil price increase is not because the US is short of oil. Let's separate this first. But it's because the US might not have the ability, not enough oil to help others, and that will cause the global supply outside the US to be short, right? Now, if you have an increase in demand of 2-3 million from the year, let's assume. And you have a supply that used to come from the US that has disappeared, it means your supply might be short by 1-2 million. So, combined, it's 4-5 million. And if you get hit by something else? If you get the Strait of Hormuz closed again, whether you close it or open it, it doesn't matter, as long as it has an impact. As long as the supply disappears by 2-3 million, that's enough. This means the world might be short by a total of 6-7 million. And if the Strait of Hormuz is 100% closed again, let's assume we don't know how much of the original 10 million that used to pass through the Strait of Hormuz has actually disappeared. No one can answer this. The numbers have never come out because no one knows. But we know it disappeared. Therefore, coming back to everything, do you see the picture? Do you see why the next round is riskier than the first? Because you have no help. One, China is not helping. I don't believe China will drag on in reducing oil imports by over 4 million barrels for many months like that. Because China, in the end, will have to increase its imports. From over 7 million in a short period, they reduced it significantly. Why? Because they want to reduce the impact, reduce the risk. But don't forget, if you take oil from the tank and release some of it, it will keep decreasing, right?
But China has... [clears throat] they don't, they are not like the US. They don't produce a lot of oil themselves. The US uses 20 million, and produces almost all of its oil, let's say it's self-sufficient. Therefore, storing oil is not necessary. They only have 300 million. But 300 million is considered very low in many years. Sometimes, if we look at the context, when people speak, "Oh, this is very risky." Because the level of oil reserves in the US is the lowest in many years. How many years? I ask, in how many years is it the lowest? And it has an impact. And what does it mean? You have to look at the overall context. If the US is self-sufficient and the reserves are low, it's okay. But it won't be able to supply to compensate for what is missing from other parts. This is more important. And second, if they can't do that, oil prices will rise. When they rise, and reach the trigger point of 100. Currently, there are 2-3 levels. The 90 level is break-even. Do you follow me? 90 is break-even, which is good. CPI is 3.7. If it's 100, it will start to be risky. It will go back to 4.3, around that. If it exceeds 100, if it's 120 and stays there, oh, it might even go to 5%, maybe 4-5% CPI. And if inflation is 4.5-5%, 5-5%, what do you think, Guitar?
Interest rates. What will you do? What will you do? Yes. And do you think it's a coincidence that you suddenly dared to start a war again? So, there are many theories, for example, maybe fear of death. Why wouldn't they want to be like you, Graham? This is a theory. Whether it's true or not, I don't know. Or perhaps you feel that the last time it wasn't over yet, and we lost a lot of face, right? Because of those 12 or 13, 12 points. Oh, almost every point, the US lost face, lost its edge. Now it has become round. It has no edge. The edge has been lost a lot.
From a geopolitical perspective, if P' Moo says, there is a red line at $100, $120 for oil, and there might be signals from the capital markets, regarding bond yields indicating contraction or fear of interest rates. If it touches that trigger, is it possible that the US will retreat? Trump might use the same formula as last time because he knows that if he fights, there will be economic damage, votes, and political position.
That's it. If it's chess, if it's chess, and I explain it, and you all understand it, you will realize what Iran has to do, right? If I, if I speak from Iran's perspective, let's assume, if I read this game, what would I do?
Mmm, have to push the price. I have to make oil go up to 120 as quickly as possible. Yes. And before that, many people might say, "Oh, Iran, they couldn't push it up much last time." I've already explained why it couldn't go up much. Why did I say last time it couldn't go up much? Right? And also, Iran itself doesn't want oil prices to go too high. Oh. Because if oil exceeds 120, becomes 150, becomes 200, and stays like that, then the whole world will be in trouble. Serious trouble. And who will they point the finger at, the US or Iran? I ask this first, right? This is predictable. Therefore, Iran also wants oil prices to be high enough to make the US suffer, but not too high to make others [clears throat] suffer. Last time, they succeeded. Yes. They succeeded, but it turned out that Trump countered the game effectively, at least for a while. So we have come to today, where, why is it happening again? And this time, the answer to Guitar's question is, if that's the case, and if oil goes above 120, then Trump has to retreat, right? That's likely. The question that should be asked more is, do you think oil will go to 120 and stay there, or can it exceed it? Due to what factors? So, if Iran, today, has to use its mechanism, its ultimate weapon, anything it has, to make the market push oil prices up to 120, maybe 130, and so on. It will become a card that makes the US think, "Oh no, does the US have to retreat again?" But today, it hasn't reached that point yet. And the help has disappeared partly, right? What I said earlier. And the help has disappeared partly. So, now, it's just a matter of time. Oil is gradually rising, rising, rising. If it reaches 120, let's assume, by the end of the month it's 120, and next month it's 110, 120, and so on. I think you, all of you, Guitar, can guess what will happen to CPI, what will happen to the market, what will happen to the stock market. Why? You can guess. It's like last time. And what will happen to Trump's reaction?
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